Bitcoin saw a significant drop early on Monday, soon after it had looked primed for a convincing move above $50,000.
The top cryptocurrency slipped from nearly $49,000 to $45,926 during the early Asian hours and was last seen changing hands near $47,790 – down 1.8% on the day, according to CoinDesk 20 data.
The decline surprised many investors, as a notable all-time high milestone had looked on the cards amid optimism generated by the recent wave of institutional adoption.
So what happened? Here are three reasons that may explain the sudden price pullback.
1. Funding stress
“Bitcoin and other cryptocurrencies, in general, looked overheated, and the Asian session drop was likely a ‘funding reset’ needed for a sustained move above $50,000,” Matthew Dibb, COO and co-founder of Stack Funds, told CoinDesk
Indeed, the cost of holding long positions in bitcoin‘s perpetual futures market, also known